Work and Wages

Minimum Wage

There is no national minimum wage. Minimum wage exists only for the public sector workers which is around 420 birr ($22). Some Government institutions set their own minimum wages.

Current minimum wage rates can be found in the Minimum Wage section.

Regular Pay

In accordance with the Labour Proclamation, wages mean the regular payment to which the worker is entitled to in return for the performance of the work that he/she performs under a contract of employment. Wages are independent of overtime premium, allowances, bonus, commissions, service charges received from the customers and other incentives paid for additional work. Wages are only paid for the work done by the worker except in case interruption on employer's behalf which makes it impossible to work (i.e. interruption in supply of tools and raw materials).

The Labour Proclamation requires the employers to pay wages in cash on working day at the work place unless otherwise agreed. In case date of payment (where already decided) falls on a weekly rest day or public holiday, the wages are paid on the preceding working day. Wages are paid directly to the worker or to the person authorized by the worker. Wages may be paid in kind but it may not be more than 30% of the wages paid in cash.

An employer is under the obligation to pay the worker wages and other emoluments in accordance with this law or the collective agreement. Wages are to be paid at such intervals as required under the national law, collective agreement or employment contract.

Generally, employer is not allowed to deduct wages except where it is provided by the law or collective agreement or work rules or in accordance with a court order or a written agreement with the worker. The amount of deduction must not exceed one-third of the monthly wages of the worker.

It is obligatory for an employer to keep a record of payment in a register specifying the gross pay and method of calculation of wages; other variable remunerations; the amount and type of deduction; and the net pay and other relevant particulars, unless there is a special arrangement on which the signature of the worker is affixed. This register must be easily accessible to all the workers and the entries are explained to the worker on request.